According to a survey released by Fidelity Investments, 47% of US institutional investors believe that digital assets have a place in their portfolios.
A survey conducted by Greenwich Associates included over 400 pensions, family offices, hedge funds, financial advisors, endowments, and foundations discovered that 47% believe that digital assets have a place in their portfolios. In addition, 22% of those surveyed already have exposure to the asset class with double that number (40%) open to making investments over the next five years.
Tom Jessop, Fidelity Executive, said:
“We’ve seen a maturation of interest from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments…More institutional investors are engaging with digital assets, either directly or through service providers, as the potential impact of blockchain technology on financial markets — new and old — becomes more readily apparent”
The part which shows how most institutions are thinking is that over 70% said that they would like to purchase investment products that hold digital assets compared to 57% saying they would buy the digital assets directly.
While about half of the participants liked the low correlation to other assets, they mentioned some obstacles preventing them from investing in the space. The biggest reasons were volatility, lack of clear regulation, their limited track record (short history), and lack of fundamentals.
Tom Jessop commented:
“Institutions are doing the work to develop their own investment theses—but there’s more work to be done as it relates to describing digital assets and blockchain technology in terms that are familiar to them. For example, price volatility, which was a primary concern of survey respondents, may dampen as the underlying custody, trading and financing infrastructure continues to develop in a direction that traditional market participants are familiar with…Institutional sentiment mirrors many of the positive developments we’ve seen in the underlying ecosystem. Venture investment in the sector continues at a healthy pace, complemented by an increasing number of security token offerings (STOs), and the global regulatory environment remains cautiously constructive.”